The TAIEX has surpassed 40,000 points and the number of brokerage accounts now exceeds 14.2 million, creating the appearance of widespread prosperity. Yet, as the index reaches new highs and the number of investors continues to grow, we should ask ourselves: How many people are truly benefiting from this apparent economic boom?
The stock market has long been regarded as a barometer of the economy, but a rising index does not necessarily indicate a corresponding improvement in the economy as a whole. The stock market’s rise is heavily concentrated in the semiconductor and artificial intelligence-related sectors, with a handful of heavyweight stocks propping up the overall index, while other industries have yet to profit to the same extent. The index’s rise alongside industrial divergence highlights the long-standing structural imbalance present in the nation’s economy.
Even more concerning is the accelerating concentration of capital in the stock market. The surge in brokerage accounts, the influx of young investors and the boom in short-term trading all suggest that the market is shifting from being driven by fundamentals to being dominated by capital and investor sentiment. When making quick profits becomes the primary incentive, the stock market is no longer just an investment tool, it instead becomes a speculative arena.
Such developments are not beneficial to the real economy. While frequent inflows of large volumes of capital into the market might drive up stock prices, they do not necessarily translate into tangible investment or industrial upgrades. On the contrary, when stock market returns appear easily attainable, capital could be diverted away from the housing market and real industries, and might even influence the career choices of the younger generation. Once the perception that it is easier to earn wealth through stocks than through work takes hold, there could be long-term consequences for the labor market and industrial development.
There have been labor shortages in frontline and technical positions. This is not merely a demographic issue, but also one tied to resource allocation and societal values. When society places excessive emphasis on capital gains while overlooking the accumulation of technical expertise and practical skills, talent naturally becomes less willing to enter positions that are vital to the foundation of the economy. The issue lies in the long-term acceptance of capital concentration in financial markets and the lack of effective mechanisms to channel that capital into the real economy. When the prosperity of the market becomes disconnected from industrial development, the end result is a structural divide in which a small minority grows wealthier.
Taiwan does indeed possess a globally competitive semiconductor industry, but it cannot rely on that single pillar alone. When resources become overly concentrated in a handful of sectors, it not only worsens existing imbalances, but also increases the economy’s overall vulnerability. If the government continues to treat rising stock prices as a political achievement while neglecting underlying problems, it would effectively be using short-term prosperity to mask long-term concerns.
Record highs on the stock market are not inherently problematic. The real issue arises when society becomes overly dependent on the stock market as its primary means of accumulating wealth, causing the nation’s economic structure to gradually lose balance. If in the short term the market is allowed to dominate resource allocation, it would ultimately lead to prosperity in indices and stagnation in livelihoods.
Chen Ching-yun is a former director of the Legislative Yuan’s Bureau of Legal Affairs.
Translated by Kyra Gustavsen
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